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My bias would be to dollar cost average money for stock purchases, rather than dumping your annual amount all at once.

Also, my personal bias is not to use money designated as savings to pay for consumer junk or consumer debt. Part of the cost of using credit to buy consumer junk is that you should expect to pay the interest charges that go along with it.

That may not be completely rational, since money is fungible, but that's the way I aim to operate. The end result is that I buy less consumer junk and usually pay nothing in interest charges to buy it ---so in the end it makes sense, at least for me.

I do give a measure of credit to such arbitrary rules to helping me achieve financial independence at age 49....

Seattle Pioneer


Such rules aren't completely arbitrary if they are effective in controlling your behavior towards achieving your goals. It is rational to behave "irrationally" if the "rational" choice would be short-circuited by your emotions down the road. For example, many people use home equity loans to pay off their credit cards. This might be a "rational" choice in that the interest rate is likely to much lower, but people who do this generally just max out their credit cards again. So now they have a home equity loan *and* credit card debt. The rational choice would have been to stick with the credit card debt even though the interest rate is higher.

The rational choice obviously is different for every person. Some people could use the home equity loan and not get in credit card trouble again. This is why I hate when people argue vehemently for absolute rules that are supposed to apply to everyone, every time, and everywhere. I think that too many people are looking for shortcuts so that they can avoid thinking. It is important to have self-awareness and understand what works for *you*.
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